FMM calls for more details on gas tariff hike

KUALA LUMPUR, The Federation of Malaysian Manufacturers (FMM) has called for more detailed information on the natural gas pricing mechanism in 2020, saying it is a major concern to the industry.

In a statement, FMM president Datuk Soh Thian Lai said the federation would be seeking further clarity from the authority on the terms and conditions of the new gas supply agreement and entry of other licensed gas suppliers in view of the gas market liberalisation with the impending implementation of the Third Party Access system in 2020.

“The industry opines that liberalisation should not be such that customers need to be tied to long contract terms,” he said.

He said the 5.3 per cent increase in the natural gas tariff effective July 15, 2019, against the backdrop of economic uncertainty, is a major cause of concern among the manufacturers, especially for gas-intensive industries such as iron and steel, rubber gloves, chemical-based and some of the non-metallic mineral products sector such as aluminium and ceramics.

“Compounding the impact is the short notification of two days despite FMM’s continuous calls for two-month pre-announcement of the rates revision which is done every six months, he added.

The federation also highlighted that the effective Gas Cost Pass-Through surcharge of RM1.74 per million British thermal unit (MMBtu) would result in an estimated additional cost of RM188,000 per industrial customer on average for the rest of 2019, based on the number of Gas Malaysia Bhd industrial customers and sales volume in 2018.

Source: BERNAMA (News Agency)